Startup Company Lawyer

AUGUST 31, 2012

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds.

Convertible Security 73

Convertible Security Equity Security Preferred Stock 73

Austin Startup

NOVEMBER 6, 2017

C-Corp largely because (i) VCs have historically favored C-Corps for nuanced tax and other reasons, and (ii) virtually all of the standardized legal infrastructure around startup finance and equity compensation assumes a C-Corp. However, times are changing. If you are an LLC tech startup, you need tax counsel.

Delaware 48

Delaware LLC Startup Silicon Valley 48

Gust

OCTOBER 5, 2011

This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing. At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertible security ” rather than “convertible promissory note.”

Finance 79

Finance Preferred Stock Term Sheet Early Stage 79

Board Effect

MAY 10, 2019

It’s important to note that the structure and contents of a cap table are unique to how a company has chosen to divide its equity. Cap tables are also used to model waterfalls and what-if scenarios, giving companies a better understanding of how different events might impact shareholder payouts and equity dilution.

Cap Table 40

Cap Table Liquidation Preference Dilution Liquidity Event 40